Chennai firm buys 48% in Sterling Holiday

The city-based Auromatrix Hotels Pvt Ltd, along with its associates, today announced the acquisition of 48.25 per cent stake in the ailing Sterling Holiday Resorts (India) Ltd.

The company has also made an open offer to the shareholders of Sterling to purchase an additional 20 per cent stake in the company at a price of Rs 11.15 per share.

Auromatrix has been joined by its subsidiary Star Logistics Pvt Ltd and Sterling's president and chief executive officer Steve Borgia in the acquisition, which has been made at a cost of Rs 9 crore.

Auromatrix also announced that it was in talks with lenders of Sterling for a possible one-time settlement amounting to Rs 150 crore of all outstanding debt.

The company has already indicated that it was willing to settle the debt for 50 per cent of its present value. Sterling has accumulated losses of Rs 160 crore as of September 30, 2003.

Kumar Sitaraman, chairman and chief executive officer, Auromatrix, said, "Going by the recent settlements in the market, we are confident that Sterling's bankers would accept our deal."

Additional funding to the tune of Rs 110 crore is expected to come into Sterling, a majority of which would be towards settlement of the debt and a small portion would be as fresh equity infusion.